A Study of Mergers and Acquisitions in India

Abstract

The present study was carried out with the aim of assessing the impact of mergers and acquisitions on the value of listed firms in India. Companies expand their business by implementing internal or external expansion strategies. In the case of internal expansion strategy, a firm grows gradually overtime in the generic course of the business, but in case of external expansion strategy, a firm grows overnight through corporate conjunction. Such annexation are in the form of mergers and acquisitions which has become a salient feature of corporate reconstructing. Since liberalization, mergers and acquisitions has been widely adopted by firms to achieve many specific goals, but one of the main reason behind this is to guarantee the long term sustained accomplishment and fast profitable business growth for their organizations. The present study has thus been undertaken to explain the motives behind such deals and to determine whether organizations undertaking this inorganic mode of expansion achieve the real benefits or not. The primary objective of the present study is to examine the impact merger and acquisition deals have on the operating performance, financial performance and shareholders wealth of the sample firms by comparing their performance before and after the deals, thus deriving their values pre and post-merger or acquisition. In other words, this study tries to explain the extent to which merger and acquisition deals are successful in improving operating and financial performance and creating shareholders wealth. The research assesses the success or failure of Indian firms involved in merger or an acquisition deal. The thesis is important as it fills the gap in the literature in which it examines the aggregate performance, performance across different sectors and also looks into firm specific level performance. To conduct a uniform research and arrive at an accurate conclusion, this study has been restricted to Indian firms involving domestic deals only. In order to achieve the research objectives...